Saturday February 16, 2013
See Hoy Chan’s project in Damansara gets good reception
By THEAN LEE CHENG
GROWTH in the residential sector is expected to continue to be healthy going forward with strong demand for well-located projects although they come with a premium, and the yet-to-be visible mass rapid transport (MRT) system, judging from recent launches.
See Hoy Chan Holdings Group director Datuk Teo Chiang Kok sold 75 of the 90 units of zero lots housing on a build-and-sell basis in The Effingham development in Damansara, Petaling Jaya. Sales via a balloting process was brisk despite the impending construction of the MRT which will parallel Persiaran Surian. Zero lots units has one side of the house against a wall with space at the front, side and the back of the house.
Prices range between RM5mil and RM9.7mil. Built-up areas range between 5,600 sq ft and 12,700 sq ft or about RM1,100 per sq ft. Sales for the rest are pending loan approvals.
The Effingham is bordered by Persiaran Surian, Dataran Bandar Utama, Tengkat Bandar Utama and Persiaran Bukit Utama. The recently-launched phase one will be closest to the MRT alignment.
Teo says the public does not yet have the full details of the MRT which will be across the road (Persiaran Surian).
“It will be about 70 ft away. MRT Corp said they are going to do some sound insulation,” says Teo.
On the strong interest generated by the gated and guarded project, the only landed strata development in that location, Teo says the dictum ... location! location! location! still holds true.
“Despite the recession in Europe, and the fragile growth in the United States, the fact remains that there is limited land left in the Klang Valley,” he says.
Teo says the location, the reputation of the developer and the fact that it is a gated and guarded landed project were three important factors. The 32-acre project will have 212 units when completed with later units further away but with a higher premium. He decline to say how much later phases will cost but he says overall property prices are expected to move up 5% to 10%.
Phase 2 will border the clubhouse with some of the units sandwiched between the clubhouse and phase 3. The last and third phase will neighbour double-storey housing on Tengkat Bandar Utama.
Over in Taman Tun Dr Ismail, serviced apartment TTDI Ascencia has half of its 154 units sold despite a hefty RM1,000 per sq ft. Because it will be built on commercial land title, utilities and assessment rates will be between 25% and 30% higher. It will be located next to the TTDI MRT station on a land area of less than one acre. Units come in rather small sizes with build-up areas ranging from 500 sq ft to slightly more than 2,000 sq ft. The small units have all been purchased, pending any drop-outs due to loan issues.
Senior general manager Mohd Johan Shadzil Mohd Daud says they have kept the built-up area small to make the project affordable.
The relatively healthy take-up rate at the Ascencia TTDI confirms the comment by Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum Mah who said a couple of weeks ago that small units of about 500 sq ft and landed units priced below RM1mil are expected to do well.
Naza's Platinum Park in the Kuala Lumpur City Centre (KLCC) is being reconfigured to make way for units below 1,000 sq ft to ensure absolute prices remain affordable.
Before, about half of the units had built-up areas of between 600sq ft and 800sq ft and the rest between 1,000 and 2,000 sq ft. The new strategy is to increase the smaller units by another 20% to 70%. Most of the units in the KLCC vicinity are 2,000 sq ft and above.
The other project which have sold well despite the coming MRT is Bandar Raya Developments Bhd's Serai in Bukit Antarabangsa, Kuala Lumpur. Serai will have two entrances at Jalan Medang Kapas and Jalan Medang Serai and the Sprint Highway is just beyond that. The MRT line will parallel Sprint. Units at Serai range between RM1,300 and RM1,500 psf.
Real Estate Housing Developers Association (Rehda) president Datuk Seri Michael Yam says location, developers reputation and pricing will continue to determine demand.
He says buyers are prepared to pay more on a per sq ft basis for smaller units and this will be the trend moving forward. At RM1,000 per sq ft, a 500 sq ft unit is RM500,000. If it is 2,000 sq ft, it will be RM2mil. So there is a combination of size and ringgit per sq ft, he says.
He says today's housing proposition is very different from before. A terraced house in Cyberjaya by the UEM group has exceeded RM1mil, which is food for thought.
Yam says judging from the brisk sales enjoyed at the higher end of the market, “there is a possibility there is a shortage of high-end houses” in certain locations.
While this end of the market may be very niche and offers a high margin, there are few developers who have the combination factors of both ability and capability, and a well-located site.
While the performance of high-end launches continue to be a pleasant surprise for developers, the other challenge facing developers today is the high number of dropout sales as a result to prudent lending measures.
The marketing personnel of a developer says higher dropout rates mean extra administrative work and lost opportunities for developers. To circumvent this, some developers only target buyers who can pay by working very closely with preferred customers of certain banks.
“Some developers offer incentives to banks who then directly market the project to their preferred customers. Half of our sales were formalised this way, with each successful loan being rewarded' with a commission,” he says.
He adds that as lending measures continue to be prudent, this will be a strategy by developers as it is a win-win situation for both developers and the banking sector.